Fixed-Rate Advance on a Home Equity Line of Credit

Lock a rate for a set period with a fixed-rate advance

Switch all or part of your balance to a fixed rate. If your needs change and you want a variable rate, easily convert it back.

The fixed-rate advance is a feature of your Wells Fargo home equity line of credit. This option lets you enjoy the benefits of your line of credit and lock an interest rate on your balance for terms of 1 - 20 years.,

A fixed interest rate, as opposed to the variable rate on your home equity line of credit, can be important in certain financial situations. The fixed-rate advance may be a good option if:

You want to have fixed monthly payments.

You're worried about rising interest rates.

You want to repay your entire balance during a set term (for longer terms only).

Without a fixed-rate advance, your home equity line of credit balance is charged the current variable rate. With the fixed-rate advance option, you can convert any or all of that balance to a fixed rate for a set term. Your fixed interest rate, and thus your monthly payments, are calculated differently and may be higher than your variable rate. When your fixed-rate advance term ends, any unpaid balance reverts back to the current variable rate.

You can get a fixed-rate advance:

At closing, when you originate your home equity line of credit

After closing, any time during the draw period

Whether you take an advance at closing or afterwards, you can convert your existing fixed-rate advance back to a variable rate at any point during your draw period. The ability to return to a variable rate may be helpful in certain situations — for example, if the current market rate is lower than the rate on your fixed-rate advance.

You can take 2 fixed-rate advances per year and can have up to 3 at any given time. The minimum amount for an advance is $10,000.

Let's say you have a $50,000 line of credit and you want to take a fixed-rate advance of $25,000 to pay for a kitchen remodel. The terms of your advance will determine your monthly payments, but you can be sure they won't change during that set period, even if the variable rate goes up. You'll still have access to the unused portion of your line of credit to help cover any other repairs or major expenses.

As you pay down the fixed-rate advances, your funds become available again.

The terms of your fixed-rate advance (FRA) will determine your monthly payment and whether you have an unpaid balance when the term ends.

Fixed-rate advances can be either fully amortizing or partially amortizing. Fully amortizing terms, which are typically longer terms, will repay your entire balance during the term. Partially amortizing terms, which are shorter terms, will have a remaining balance after the term that will revert back to the current variable rate.

Longer terms — 5 -20 years

May have higher monthly payments.

Will repay your entire balance during the FRA term.

For longer terms that finish after draw period ends, FRA payments will continue until the balance is paid in full at the end of the term.

Shorter terms — 1-5 years

May have lower monthly payments.

Partially repays your balance during the FRA term.

Shorter FRA terms must end at least 1 month before your end of draw.

You can make additional principal payments at any time without penalty. This may help you pay off your balance faster or decrease any unpaid balance. It also may result in less interest paid over time.

Terms: The line of credit has a draw period of 10 years plus 1 month, after which you will no longer have access to borrow funds and will be required to repay the borrowed balance within a 20-year term. There is a required minimum monthly payment of $100. The account is subject to application, credit qualification, and income verification; additional evaluation and verification criteria may apply. Your actual APR will depend upon your credit transaction and credit history and will be determined when a credit decision is made. For questions, please contact us at 1-800-668-4730.

APR and Fees: The APR for a Wells Fargo Home Equity Line of Credit is variable and based on the highest prime rate published in the Western edition of The Wall Street Journal "Money Rates" table (called the "Index") plus a margin. The index as of the last change date of December 14, 2017, is 4.50%. As of February 2, 2018, margins range from 4.750% to -0.125% for lines of credit from $25,000 to $499,999 secured by owner-occupied properties with 70% combined loan-to-value. Corresponding variable APRs range from 9.25% to 4.375%. The minimum line of credit amount is $25,000. Your minimum APR, including discounts can't go below the 1% floor rate. Your variable rate won't increase more than 2% per year based on your anniversary date and will never be more than 7% higher than where you started (maximum of 18%).

There is a $75 annual fee, which is waived for the first year. Your annual fee may be waived thereafter; please talk to a banker for details. A $500 prepayment fee may apply if the account is closed within 3 years from account opening. Account opening fees, including applicable state or local mortgage taxes, may be paid to Wells Fargo, its affiliates or third parties and range from $19 to $18,000 depending on the property type, the state in which the property is located and the amount of credit extended. Hazard and, if applicable, flood insurance is required.

Relationship discounts: If you don't have an eligible Portfolio by Wells Fargo® account at the time you open your home equity line of credit, other lesser discounts may be available to you and will require automatic payments from a qualified consumer deposit account. To find out which accounts qualify for a relationship discount, contact a Wells Fargo banker. Relationship discounts cannot be combined.

There is no limit on the maximum amount of a fixed rate advance taken at origination (up to your credit limit). The minimum fixed rate advance amount is $10,000. After account opening, additional fixed rate advances may not exceed $250,000 of the aggregate principal balance, or your credit limit, whichever is less. You may request up to 2 fixed rate advances each year with up to 3 fixed rate advances at one time. Fixed rate advances have a term of 1 to 20 years, depending on the amount advanced; except that for Texas homestead secured accounts, the term is 1 to10 years.